Caraco Pharm. Labs. v. Novo Nordisk, 566 U.S. ___ (2012)
In a unanimous opinion today, the Supreme Court held that an ANDA applicant may employ the counterclaim provision of 21 U.S.C. § 355(j)(5)(C)(ii)(I) not only to seek the delisting of a patent from the Orange Book, but also to force amendment of an Orange Book "use code." The Federal Circuit had held that the counterclaim provision was not available for the second purpose. The Supreme Court reversed that decision and remanded the case for further proceedings.
Today's decision is notable for being the first ANDA case decided by the Supreme Court since the Hatch-Waxman Act was passed in 1984. Moreover, the tone of the Court's opinion is very pro-generic.
21 U.S.C. § 355(j)(5)(C)(ii)(I) provides that if an ANDA applicant is sued for patent infringement,
the applicant may assert a counterclaim seeking an order requiring the [NDA] holder to correct or delete the patent information submitted by the holder under subsection (b) or (c) of this section on the ground that the patent does not claim either--(aa) the drug for which the application was approved; or (bb) an approved method of using the drug.
In this case, Caraco filed an ANDA for a generic version of Novo's PRANDIN (repaglinide), which is FDA-approved for the treatment of diabetes in three different treatment regimens: (1) alone; (2) in combination with metformin; and (3) in combination with thiazolidinediones. U.S. Patent No. 6,677,358, claiming the use of repaglinide in combination with metformin, was listed in the Orange Book at time Caraco filed its ANDA. To avoid infringing the '358 patent, Caraco submitted its ANDA with proposed labeling omitting the patented regimen, seeking approval only for the use of repaglinide in the unpatented regimens. Accordingly, Caraco's ANDA included a section viii statement, indicating that Caraco sought approval for only unpatented uses of the drug.
The FDA, however, rejected Caraco's section viii statement because the use code that Novo provided in connection with the '358 patent overlapped with Caraco's proposed labeling. Novo's use code was "A method of improving glycemic control in adults with type 2 diabetes"--in other words, the use code covered all three of the approved uses, not only the single patented use. After its section viii statement was rejected, the only way for Caraco to seek approval of its ANDA prior to expiration of the '358 patent was to file a paragraph IV certification. Caraco did so, which meant that Caraco was also required to amend its proposed labeling to be identical to the PRANDIN label. Thus, Caraco was forced to pursue approval of repaglinide for all three approved uses, including the patented use.
After Novo sued Caraco for infringing the '358 patent, Caraco filed a counterclaim under § 355(j)(5)(C)(ii)(I), seeking to force Novo to narrow the PRANDIN use code such that it could pursue approval of repaglinide for only the unpatented uses. The district court allowed the counterclaim, but the federal circuit reversed the district court, and Caraco appealed to the Supreme Court.
In today's opinion, the Supreme Court rejected each one of Novo's arguments. First, the Court "dispose[d] of a recently raised jurisdictional argument." Novo contended that the courts lost subject-matter jurisdiction over the case at the moment Caraco filed its section viii statement. But, according to the Court, that "argument is wrong even assuming (as Novo contends) . . . that a section viii filing is not an act of infringement." According to the Court, "[t]he want of an infringing act is a merits problem, not a jurisdictional one."
Proceeding to the merits, the Court addressed Novo's argument that an ANDA applicant may use the counterclaim provision only if the Orange Book-listed patent does not claim any approved method of using the drug, regardless of whether the ANDA applicant seeks approval for that use. The Court agreed with Caraco: the counterclaim provision is available "whenever the patent does not claim a method of use for which the ANDA applicant seeks to market the drug." Here, the court read the counterclaim provision in the context of the Hatch-Waxman Act as a whole:
The Hatch-Waxman Amendments authorize the FDA to approve the marketing of a generic drug for particular unpatented uses; and section viii provides the mechanism for a generic company to identify those uses, so that a product with a label matching them can quickly come to market. The statutory scheme, in other words, contemplates that one patented use will not foreclose marketing a generic drug for other unpatented ones. Within that framework, the counterclaim naturally functions to challenge the brand's assertion of rights over whichever discrete use (or uses) the generic company wishes to pursue. That assertion, after all, is the thing blocking the generic drug's entry on the market. The availability of the counterclaim thus matches the availability of FDA approval under the statute: A company may bring a counterclaim to show that a method of use is unpatented because establishing that fact allows the FDA to authorize a generic drug via section viii.
The Court then addressed Novo's argument that the "counterclaim does not provide a way to correct use codes because they are not 'patent information submitted by the [brand] under subsection (b) or (c)' of § 355." Here, although subsections (b) and (c) refer expressly only to "the patent number and the expiration date of any patent" claiming the drug or a method of its use, the Court read "submitted under" broadly. According to the Court, "use codes fall within the counterclaim's ambit if the phrase 'submitted under' reaches filings that not only subsections (b) or (c) themselves, but also their implementing regulations require." The Court cited precedent in support of such a broad reading, stating that "'Patent information submitted . . . under subsection (b) or (c)' most naturally refers to patent information provided as part of the 'comprehensive scheme of regulation' premised on those subsections."
The Court concluded:
The statutory counterclaim we have considered enables courts to resolve patent disputes so that the FDA can fulfill its statutory duty to approve generic drugs that do not infringe patent rights. The text and context of the provision demonstrate that a generic company can employ the counterclaim to challenge a brand's overbroad use code. We accordingly hold that Caraco may bring a counterclaim seeking to "correct" Novo's use code "on the ground that" the '358 patent "does not claim . . . an approved method of using the drug"--indeed, does not claim two.